Soaring tech giants and their impressive multi-year gains have stolen the show and left many value investors in the dust. This has led many to think that a seismic shift has taken place in the market and that dividends aren’t as important to returns as they used to be.

A look at some global benchmarks and their returns for nearly the past two decades appears to back this up, at least from a price perspective.

Annualized performance for the MSCI ACWI ex-USA index posted returns of 4.24% from 11/01/01 until the end of 2017, easily beating out a high-dividend-yield version of the benchmark which saw gains of 2.83% on average. For global developed markets, as represented by EAFE, a similar trend emerges, with the high-yield version underperforming the traditional index, this time to the tune of roughly 120 basis points per year.

However, this is just one aspect of the picture. Investors also need to consider dividend yields and their contribution to overall return. As is to be expected, the high-yield versions of the indexes mentioned above easily beat out their traditional counterparts from an income perspective, but what may be a surprise is the overall total return comparison.

For both the ACWI ex-USA as well as the EAFE, total returns—which include both price and reinvested dividends—favor high-dividend-yield indexes. In both cases, outperformance is in excess of 60 basis points per year on average.

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